The latest from Michael Mauboussin at Credit Suisse was released this week. The report digs into the important question of how the rise of index funds are impacting the market.

About 39% of AUM (and growing) currently sits in index funds and ETFs. But there is a point where that becomes a problem. Everyone can’t index because then nobody is buying based on fundamentals. So at what level does the balance between active and passive investing lead to an unhealthy market?

Well, Mauboussin and crew, think they have a way to measure it. Or, at least, measure the opportunity in the market, assuming you find an active manager with the skillset to take advantage of it. Continue Reading…

Howard Marks delivers a very consistent message on the importance of understanding where we are in the cycle. He does so because risk changes as we move through the cycle.

So if you’re basing your allocation decisions on risk (you’re controlling for risk, not returns), this is a most important thing to know. In the Investor Series, I linked to last week, Marks came back to explain why a few times: Continue Reading…

Recode held its Code Conference this week, which had several great interviews. There’s a link to all the full interviews below. Some took a slight political bent – no surprise considering the climate – but still retained its tech focus.

As a side note: I get why people worry about tech being too disruptive, but this has been going on since the industrial revolution. Nobody knows beforehand all the hazards a new innovation might bring until after the fact, as we found out with the social media “hacking” and “fake news” in the recent election.

The general takeaway is that innovation often gets messy but the thing about tech is that it continues to innovate and disrupt itself during those messy times (the real issue is our tendency to project the big problems as everlasting as if we’ve lost our ability to find solutions). Continue Reading…